Project Risks and Mitigation Techniques for Oil and Gas Industry

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PROJECT RISKS AND MITIGATION TECHNIQUES FOR OIL AND GAS INDUSTRY Reservoir Uncertainty This may be the greatest project management risk in the entire industry. Exploratory wells can only provide limited information to the reservoir engineering team – who in turn must take this limited info and provide an educated guess of the amount of reserves to the production team who will soon report to the project team. Prospective oil and gas projects are only progressed from the concept phase if it is believed that the reserves can be recovered safely, efficiently, and most importantly economically. Initial recovery estimates are regularly only within a fraction of the actual reserves recovered at the end of the project life cycle. After the look-back over a project, the total reserves recovery will ultimately define if the project was successful or not. Mitigations • Design facilities to allow for future expansion in case production exceeds the originally planned estimates. • Strategically position (or install) facilities near other unexplored (but identified) reservoirs to allow other potential developments to utilize the same common facility. • Have a plan to use secondary or tertiary recovery methods (i.e. water injection, artificial gas lift, etc.) if the initial recovery methods are not producing satisfactorily. Health, Environment, and Safety (HES) HES is a big concern for the entire oil and gas industry. Poor HES management could result in personnel injury/fatality, negative environmental impacts, and damage to facilities – all of which will have huge detrimental impacts on a project and all of those who have a stake in it. For that reason, HES is commonly managed at the project team level and by others outside of the project team... ... middle of paper ... ...ll effects of factors such as the current recession, tighter access to capital and declining reimbursement all have an impact on health care capital projects and will continue to slow down spending. However, essential projects will continue to be implemented despite the overall economy. Works Cited ACE Group (2012). Emerging Environmental Risks in the Healthcare Industry, http://www.acegroup.com/Attachments/Emerging-Environmental-Risks-in-Healthcare.pdf Accessed 4/5/2014. Arredondo, R. (2012). A Working Healthcare Project Risk Management Approach, http://www.cedarcrestone.com/blog/?p=510. Campobasso, F. and Kucharz, J., O’Keefe, M. (2009). Managing Capital Project Risks in a Challenging Environment: What Health Care Boards and Executives Need to Know, http://www.americangovernance.com/resources/monographs/09-managing-capital-projects.shtml Accessed 4/.6/2014.

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